It is not possible to do better than free markets, not because of human "nature", but because of human limitations. It may someday be possible for post-humans (for example the Vile Offspring in Strauss's Accelerando) to develop superior algorithms for economic exchanges and planning; but for humans there is no possible "solution" to the coordination problem as good as prices set by a free market (a set of open exchanges). As an aside about regulation - the less regulation, the more accurate the information encoded in prices will be; but there are other aspects of society to take into account than accurate prices - like everything in real world societies it is a trade off between multiple, sometimes conflicting values.

ADDED: I strongly recommend that anyone interested in the value of markets to read Thomas Sowell's "Knowledge and Decisions".